CIMB
Group Holdings Berhad will join forces with RHB Capital and Malaysian
Building Society Berhad in a proposed mega-merger. – Reuters pic,
September 20, 2014.Malaysia's main bank workers union has
criticised Putrajaya for failing to consult them over three financial
institutions eyeing a merger or to ensure that their pension fund is
being spent well in the process.
National Union of Bank Employees (NUBE) secretary-general J. Solomon
said the Ministry of Finance (MoF) appeared to be making all the
decisions unilaterally in the proposed mega-merger of RHB Capital, CIMB
Group Holdings Berhad and Malaysian Building Society Berhad (MBSB).
"It is very disappointing that MoF has not taken the initiative to
consult the stakeholders, including NUBE, to ask for views or opinions
regarding the merger," Solomon told The Malaysian Insider.
The proposed mega-merger has made headlines in business news pages as
it could make the merged entity as the largest lender in Malaysia,
surpassing Maybank Berhad. CIMB Group is the second-largest bank in
Malaysia at present.
Solomon said the workers of financial institutions were not trying to
tell the management how to run the business, but their views should be
taken into account.
He reminded Putrajaya that it had been part of a tripartite meeting
with banks and workers in the early 2000s, where “all parties agreed
that there would be consultations with the workers before any proposed
merger of financial entities was approved".
Solomon also said the involvement of the Employees Provident Fund (EPF) in the merger raised questions and speculation.
"There is no transparency in how the workers' funds are being spent and
this can lead to a lot of unnecessary speculation, which can affect
morale."
He was referring to the controversy over the EPF's voting rights in the
three-way merger following the leak of an unsigned letter on September
4, purportedly from unhappy board members of RHB.
The letter carried strong objections to permitting EPF to vote on the resolution to approve the proposed merger.
The letter also said that EPF, as the major shareholder and related
party of RHB Capital, should abstain from voting on the merger, as the
transaction involved the interest of EPF due to its large shareholding
in CIMB.
"NUBE is concerned not only in the context that workers'
representatives have not been consulted over the merger, but also how
their funds are being invested," Solomon said.
He also expressed concern for customers as banks appeared to be
charging fees for services which had previously been given free.
"Bank employees are also bank customers and they face being charged additional fees, like ordinary customers."
Solomon warned that Bank Negara had to regulate the banks and financial
institutions to ensure that they were customer-friendly.
"Otherwise, we are looking at a possible scenario where banks will eventually only serve the rich and influential," he said.
"The poor will either stare at the banks whose services are beyond
their reach, or else the poor men's money may be used to finance the
rich."
Solomon said in the 1990s, there were financial institutions and banks
operating in Malaysia, but the 1997 Asian financial crisis brought
change.
"Putrajaya gave the excuse that banks needed to merge in order to be
stronger, which would also benefit the rakyat," Solomon said.
"However, with the merger came the introduction of additional fees and charges," he said.
For instance, if a customer makes more than four withdrawals from the
ATM in a month, charges are levied on subsequent withdrawals in that
month.
"Banks have also introduced charges for over-the-counter cash transactions which do not exceed RM10,000," Solomon added.
"What is the point of the banks becoming globally strong while the
masses in the country are suffering?" he asked. – September 20, 2014.